Business Level strategy /Competitive strategy Competitive Strategy is defined as the long term plan of a particular company in order to gain competitive advantage over its competitors in the industry. It is aimed at creating defensive position in an industry and generating a superior ROI (Return on Investment).

Business Level Strategy How do we support the corporate strategy? How do we compete in a specific business arena? Three types of business level strategies: Low cost producer Differentiator Focus Four areas of focus Generate sustainable competitive advantages Develop and nurture (potentially) valuable capabilities Respond to environmental changes Approval of functional level strategies

Competitive Strategies

Functional / Operational Level Strategy An example. Business L.S.: Become the low cost producer of widgets Functional L.S. (Mfg.): Reduce manufacturing costs by 10% Operational (Plant #1): Increase worker productivity by 15% Functional: How do we support the business level strategy? Operational: How do we support the functional level strategy?

A Simple Organization Chart (Single Product Business) Level Strategy Business Research and Development Human Resources Manufacturing Marketing Finance Functional Level Strategy

A Simple Organization Chart (Dominant or Related Product Business) Corporate Level Multi business Corporation Business 1 (Related) Business 2 Business 3 Business Level Research and Development Manufacturing Marketing Human Resources Finance Functional Level

(Multi-business) Corporation Strategic Business Unit 1 An example of an Unrelated Product Business (Note: By itself, an SBU can be considered a related product business) SBU: a single business or collection of related businesses that is independent and formulates its own strategy A (Multi-business) Corporation Ex.: G.E. (General Electric Corp.) Strategic Business Unit 1 S.B.U. 2 Company 1 Co. 2 Co. 3 Division 1 Div. 2 Div. 3

An emergent view Emphasize the uncertainty of the future and suggest that setting out identify purpose and a single strategy and then develop a complete strategic plan may be fruitless task

What is emergent perspective to strategy A set of certain consistent actions that form an unintended pattern that was not initially anticipated or intended in the initial planning phase. For example, although unintended, adopting an emergent strategy might help a business adapt more flexibly to the practicalities of changing market conditions. Strategy More planned approached/ Intended strategy Emerged outside the formal plan /Unintended pattern recognizing the changing conditions

Henry Mintzberg's emergent strategy

Intended strategy through Deliberate planning process Strategic drift Strategic happens when organization strategy is no longer relevant to the external environment facing it Environment forces ????? Intended strategy through Deliberate planning process Strategic drift

Rate of responding to the environmental change

What if you don’t redefine your business purpose –Strategic drift

Slow response to the market led to strategic drift